CalPERS Update #10: Next Steps & Who Oversees CalPERS Anyway?

CalPERS, long term care update, older black woman with "what's going on?" expression

By Bonnie Burns, Training & Policy Specialist

Many CalPERS long term care policyholders have contacted California Health Advocates for information about the status of the lawsuit against CalPERS. We have attempted to get current information and have had the same experience many policyholders have had. We have no information beyond what can be found on the class action lawsuit website.

Not all CalPERS long term care insurance policyholders are members of the lawsuit. Policyholders who were members of the original class action lawsuit continue to be members as long as they pay premiums and retain their insurance benefits and have not formally withdrawn from the lawsuit.

The lawsuit against CalPERS is currently scheduled for a jury trial on May 15, 2023 following the collapse of the settlement last year. The parties are reported to be continuing to negotiate towards another settlement. In the meantime there are a number of legal actions taking place with documents being filed with the court by both parties. The final status report and motions are scheduled to be filed by the parties with the court on March 15, 2023 prior to the jury trial. In the event a settlement agreement is reached prior to the trial date, and the court approves it, the jury trial will be postponed.

Many of the policyholders contacting us have asked questions about the CalPERS program, and the ability of CalPERS to increase premiums. CalPERS created the program separate from its other benefit programs. CalPERS outsourced its administration to a third party administrator, Long Term Care Group (LTCG) since the early days of the program. It is self-funded and exempt from state law therefore policyholders are not protected by a state law that requires an insurance company to offer their policyholders paid-up benefits equal to the premiums that have been paid with every premium increase. If CalPERS had been subject to that requirement, some people who lapsed their policies might have gotten some benefit from the premiums they paid.

In addition, CalPERS is not subject to oversight by the department of insurance and actuaries who regulate insurance companies selling long term care insurance. The CalPERS Long Term Care Program is only responsible to the CalPERS board and CalPERS members. There is no state supervision or responsibility for the long term care insurance program.

We will post more information as we are able to find it, and answer questions as they come to us.

Read our previous CalPERS updates below:

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.